A draft law recently adopted by the Russian State Duma (lower house of the parliament), though not yet approved by the Federation Council (upper house of the parliament) or signed by the President would amend existing law to allow the cultivation of certain plants that contain narcotic and psychedelic substances.

Significantly, the bill would not decriminalize recreational use, nor would it permit the development of private dispensaries. It also contains certain restrictions and limitations:

First, cultivation would be permitted only for certain specified purposes: medical and veterinary use and /or industrial needs not related to the production of narcotic and psychedelic substances, such as, according to an explanatory note submitted to the Duma, production of various oils for the edibles industry.

Second, cultivation for medical use will be permitted only for licensed state-owned enterprises. Cultivation of opium for industrial needs not related to the production of narcotic and psychedelic substances will also only be permitted for licensed state enterprises. Cultivation of other plants containing narcotic substances for industrial use will be permitted (subject to other restrictions) for all legal entities and sole traders. The draft law contains no mention of the type of legal entities permitted to cultivate and does not contain any specific requirements to these legal entities, including their licensing.

Third, the Government will determine which specific kinds of plants will be allowed for cultivation, as well as requirements and procedures for cultivation.

While the introduction of this draft law may, at first glance, appear to be part of a broader international trend towards liberalization, it actually appears to be more closely connected to a different political trend – ongoing tensions between the U.S. and Russia. An explanatory note submitted in connection with the bill explains that 90% of the producers of narcotic and psychedelic substances that are essential for state hospitals are located in countries that have imposed sanctions on Russia, implying that the current regime makes the Russian health care system vulnerable to international political pressures. Passage of the law is unlikely to result in a proliferation of recreational use or private dispensaries, as has happened in other countries. Given that the draft bill was introduced by the Government, we expect that it will pass with relatively few changes.

Author

Roman Butenko is an associate in the Moscow office of Baker McKenzie, specializing in compliance.

Author

Tom Firestone is Co-Chair of the firm's North American Government Enforcement practice and is a member of the Firm's Global Compliance & Investigations Steering Committee. He represents clients in matters involving anti-corruption and the US Foreign Corrupt Practices Act (FCPA), internal investigations and transactional due diligence. He is also a member of the firm's Cannabis Review Committee and has advised clients on compliance issues related to cannabis.